These Families Are Shutting Down the Bank of Mum and Dad

The parents have been paying the monthly phone bill and covering rent for far longer than in prior generations . Some are helping their children with down payments to buy homes. Others are putting a roof over their kids’ heads well into their 20s and 30s to help them save because they can’t cover rising costs of living.

That comes with a price tag. More than a quarter of parents who are helping their children financially said it caused them to postpone retirement, according to a recent Credit Karma survey . More than half had to cut back on living expenses and about a third took on debt.

Feeling stretched, they are negotiating the terms of separation.

Nancy Clark and her then-28-year-old son, Reid Clark, had just sat down to dinner in June 2022 when the conversation turned to when he would move out. The topic had come up before, but this time they decided to set a date one year later.

Nancy, now 60, said she remembers thinking: “I know that becoming financially independent needs to feel a little painful.”

Reid set off on his own last June. He ditched a job managing his family’s three ice cream shops in New Hampshire for a gig as the assistant to a professional ice hockey team’s mascot in St. Paul, Minn. He also works at an M&M’s store.

Nancy bought him groceries when he moved in and occasionally gives $50. By this June, Reid will no longer get any financial help if he’s short. He hasn’t needed to hit up his mum for rent money in the past few months. “I want to chart my own path in life,” he said.

Taking such a gradual approach and framing the conversation around gaining financial independence give it a positive spin, said Rocky Fittizzi , a wealth strategies adviser at Bank of America Private Bank. Telling your children you’re cutting them off suggests it is a punishment.

An emotional decision

Many adult children are living at home, or moving back in, to save money. The cost of food and rent have jumped, and more college graduates are saddled with student debt. The share of 25-to-29 year-olds with student loans rose to 43% in 2022 from 28% in 1992. The rise was even bigger for those between 30 and 34, according to a recent report by the Pew Research Center.

Some 20% of men and 12% of women between 25 and 34 years old lived at home last year, far higher than two decades ago, according to Census Bureau data.

During the pandemic, layoffs and money strains forced some adult children and their parents to live together and share finances, said Arne Boudewyn at Insights Squared Consulting Group, a family wealth consulting company.

Worries over losing the close bonds forged during those years may add to the stress of ending monetary help, financial advisers said.

“Letting go is often harder for parents these days because we need to feel needed as much as we want to feel wanted,” said Bobbi Rebell , the founder of Financial Wellness Strategies, which gives workshops for parents about how to teach their children to be financially responsible.

Tough love, but not too tough

Pam Lucina still remembers the day about 30 years ago when her father told her she was off the payroll. She was in her first year of law school. Her parents had paid for her undergraduate education. Because she assumed they would pay for law school too, she had chosen a pricey school.

She graduated with $40,000 in student debt and couldn’t afford to contribute to her 401(k) for about five years.

“I know that my parents sacrificed to give me what they did and I’m grateful for all of their past support but I wish I had been more prepared,” said Lucina, 52, now an executive vice president at Northern Trust .

Lucina said the experience was a main reason she became a financial adviser. She has three daughters, and recently asked the oldest to complete her own college financial-aid form.

She tells clients that even if they have good intentions when cutting off their kids, it can feel to the children as if their parents are withholding money to punish them.

“Assure them that love is not contingent on finances,” she said.

Create an exit strategy

There are times when financial help is necessary. With a health issue or addiction, parents often use a special needs trust, where funds typically go directly to the child’s treatment and recovery. Others may opt to help children temporarily after a layoff.

But financial advisers said parents need to set boundaries.

Ashley Kaufman ’s parents told her she would need to move out of their Manhattan apartment, where she was living rent-free, once she saved $100,000 for a down payment on her own place.

The cybersecurity consultant hit her goal by the time she was 25, but she wasn’t sure she was ready to move out right then. She enjoyed seeing her younger siblings regularly and playing with her family’s dog named Waffles, she said. Her parents encouraged her to go to some open houses anyway.

Kaufman, who is the stepdaughter of Rebell from Financial Wellness Strategies, is now 27. She bought her apartment around two years ago. She’s happy to be building equity in her place.

“I’m glad my parents gave me a little nudge,” she said.

—Julia Carpenter contributed to this article .

For decades, the world’s computing power has quietly expanded at an astonishing pace.

From the first transistor developed at Bell Labs in 1947 to modern processors containing billions and even trillions of transistors, each generation of technology has been faster, smaller and more powerful than the last.

But according to quantum physicist and technology entrepreneur David Reilly, that era of effortless progress is beginning to slow.

Reilly, CEO of Sydney-based Emergence Quantum and Professor of Physics at the University of Sydney, says the computing infrastructure underpinning modern economies is approaching fundamental physical limits.

And that could have enormous implications for finance, artificial intelligence and global investment.

Speaking at an industry event organised by Kanebridge International, Reilly said many critical parts of modern society depend on computing and the infrastructure used to process information.

The slowdown behind the tech boom

For years, the technology industry relied on a steady improvement known as Moore’s Law, where the number of transistors on a chip doubled roughly every two years.

More transistors meant more computing power, allowing faster software, smarter devices and ever-larger data systems.

Today, however, those gains are slowing.

“It feels to me very innate that I’m going to just find that next year there’s going to be another breakthrough,” Reilly said.

“But if you look at the data…there’s a slowing down, a roll off in performance that started some 10, 20 years ago.”

Rather than making chips dramatically faster, manufacturers are now largely increasing computing capacity by packing more transistors onto each processor.

The approach works, but it comes with growing complexity, higher costs and increasing energy demands.

The brute-force race for AI

That challenge is already visible in the massive data centres being built to support artificial intelligence.

In the race to dominate AI, companies are constructing vast computing facilities that consume huge amounts of electricity and water. Reilly described this expansion as a “brute force” approach driven by the global competition to develop advanced AI systems.

Yet the demand for computing power continues to accelerate.

Artificial intelligence, advanced robotics, healthcare research, pharmaceuticals and cybersecurity all require far more processing capacity than today’s systems can easily deliver.

The question now facing the technology sector is whether traditional computing can keep up.

Enter quantum computing

That is where quantum computing enters the conversation.

Unlike conventional computers, which process information using binary switches that represent ones and zeros, quantum computers exploit the unusual behaviour of particles at the atomic scale.

Reilly describes them as a fundamentally different type of machine.

“So a quantum computer is a wave computer,” he said.

Instead of processing information through simple on-off switches, quantum systems can use wave-like properties of particles to process many possible outcomes simultaneously.

Those waves can interact in complex ways, reinforcing correct solutions while cancelling out incorrect ones. In theory, this allows quantum systems to tackle certain types of problems dramatically faster than classical computers.

What it could mean for finance

The concept may sound abstract, but its potential applications are significant.

Quantum computers are expected to transform areas such as materials science, chemical modelling and pharmaceutical development.

They could also help solve complex optimisation problems in logistics, finance and risk management.

For financial institutions in particular, the technology could offer new tools for detecting fraud, analysing market behaviour and optimising portfolios.

But the shift will not happen overnight.

“One message to take away is that quantum is not going to suddenly solve all of your problems,” Reilly said.

Instead, he said quantum systems will likely complement existing computing technologies as part of a broader and more diverse computing ecosystem.

Why data centres may soon “go cold”

One key change already emerging is how computing systems are physically designed.

Many next-generation technologies, including quantum processors, operate far more efficiently at extremely low temperatures. As a result, future data centres may rely heavily on cryogenic cooling systems to manage heat and energy consumption.

Reilly believes that the shift will gradually reshape the computing industry.

“Over the next five years, you’re going to see data centres go cold,” he said.

“And as that happens, they almost drag with them new compute paradigms.”

Emergence Quantum, the company he co-founded, is focused on developing technologies to support that transition, including cryogenic electronics and integrated hardware platforms designed for quantum computing and energy-efficient systems.

A new technological era

For investors and businesses, the technology remains in its early stages. But the scale of global interest is growing rapidly.

Governments, research institutions and technology companies are investing heavily in quantum research, betting it could become a foundational technology for the next generation of computing.

For Reilly, the moment feels similar to earlier technological turning points.

In the 19th century, new discoveries in thermodynamics helped drive the development of steam engines and the Industrial Revolution. In the 20th century, advances in electromagnetism led to radio, television and eventually the internet.

Quantum physics, he suggests, could represent the next chapter in that story.

“Today we have, as a society, in our hands new physics that we’re just beginning to figure out what to do with,” Reilly said.

“But I think it’s an exciting time to be alive and watch what happens over the coming decades.”